Career designations most of us understand, MD, CPA, DO,JD, DDS, DMD, etc., identify vetted professionals having completed advanced educational courses of study, successfully passing demanding tests and examinations, qualified for state licenses to practice, are members of their professional associations and subscribe to a rigid code of ethics.
When your health is involved you need help from a qualified professional. When you run into a legal issue you need help from a qualified professional. When you have an industrial strength tooth ache you need help from a qualified professional.
Unfortunately, when issues involve financial planning or the purchase of life insurance, too many of us fail to recognize the importance of seeking out a qualified professional for advice. If the subject is financial planning, look for designations such as CFP, CFA, ChFC, behind your resource’s name. If the subject is life insurance, look for the designation CLU or ChFC, and someimes CPA, behind your resource’s name.*
Financial planning and ownership of life insurance are elements of an estate plan, and proper estate planning means having your attorney team up with insurance and financial planning professionals to ensure the best outcome.
Only one of the professionals mentioned here typically does not charge you a fee for his/her advice: The CLU. (When the CLU provides life insurance for you, the insurance company under consideration compensates him/her for bringing the business to them and servicing it…no sale, no service fee)
A CLU (Chartered Life Underwriter) invests significant time and treasure in university level (via The American College in Bryn Mawr, PA.) study, covering law, trusts, actuarial science, economics, estate and income tax issues, to name a few, as they relate to Life Insurance, on his/her way to earning the CLU designation.
Is your life insurance agent a CLU or ChFC? If not, Why not? Buying life insurance is serious business with long term consequences. Seek out a professional when purchasing something as important as Life Insurance. It’s no brainer.
* MD Medical Doctor… CFP Certified Financial Planner
DO Doctor of Osteopathic Medicine… CFA Chartered Financial Analyst
CPA Certified Public Accountant… ChFC Chartered Financial Consultant
JD Juris Doctor (Attorney)… CLU Chartered Life Underwriter
DDS Doctor of Dental Surgery…
DMD Doctor of Medicine in Dentistry…
Okay, you are about to rent office space for your new business and your new landlord insists you provide proof of business insurance in order to finalize the lease. What is it and how do you get it?
“Insurance” is a very broad term with many applications. There are life and health insurance plans providing benefits when the insured person dies, or incurs expenses resulting from illness or accidental injuries. Subsets include Disability Insurance, to replace income lost due to illness or accidental injury, plus Long Term Care Insurance to provide dollars to pay the bills for at-home or institutional care. The common thread there requires the insurance be provided to cover a living person.
Then there is insurance to cover things and events…Think planes, trains and automobiles…Mechanical things break, or someone unintentionally breaks them, creating a need for dollars to fix or replace them. Fire or weather damages or destroys a home or business, creating the need for cash now to repair or replace. That form of insurance is referred to as “Property/Casualty” insurance, or short form,”P&C Ins.”.
Insurance on residences or personal automobiles is referred to as “Personal Lines insurance”. Insurance on offices, stores and most other items needed in order to operate a business is referred to as “Commercial” lines insurance.
There is insurance to cover events and legal responsibilities such as professional liability, business errors & omissions, and similar events.
In addition to the above there are dozens of additional insurance products to cover much more than has been mentioned here.
Average small business owners, will need Commercial Insurance to cover losses created by fire and wind storm, burglary/theft, in addition the liability insurance in case someone is injured while in his/her business establishment. Get those from a qualified Commercial Property & Casualty Insurance Agent. Good ones will have affordable policy packages to fit your landlord’s requirements.
You may or may not be able to get what you need from the guy or gal who insures your home or automobile, since most of them specialize in “Personal Lines” of insurance. Instead, Google “Commercial Insurance” in your town to find a more qualified agency which specializes in serving business clients.
Key character in Margaret Mitchell’s epic novel, Gone With the Wind, Scarlett O’Hara, handles difficult situations by kicking them down the road with signature line, “I’ll worry about that tomorrow”.
Not having a plan to replace your family’s lost income stream if you don’t survive an accident or illness this week is precisely, “I’ll worry about that tomorrow”.
How many times have you seen a story on local TV news about someone’s death or disabling injury, followed by: “A GoFundMe account has been set up at XYZ Bank to pay for the funeral…or hospital bills..etc.”
What is your plan? If your are financially secure, make sure your survivors have access to cash in an emergency. If you and your spouse or trusted partner have separate savings/checking accounts, consider updating them to joint accounts. Consider other ways to address financial issues now rather than ignoring them.
Today, start building a rainy day fund to cover at least six month’s family living expenses. Do it now with cash and Life and/or Disability Income Insurance…then take it off your, “I’ll do it tomorrow” list.
With the advent of 2010’s Patient Protection and Affordable Care Acts(Obamacare),many small business owner/operators abandoned their support for group life/health/disability insurance plans and opted to have their employees enroll in individual guaranteed issue health insurance policies instead. Doing so relieved the company owner from paying out substantial group insurance premiums every month and, in many cases, allowed former group insurance covered employees to shift some of their health insurance premium costs to the tax payers through insurance premium credits based on former employees’ yearly incomes.
Spring forward to 2019…Affordable Care Act premium costs have vaulted into the stratosphere forcing those former small business employees to add crushing annual deductibles to their already over-priced health insurance plans in an attempt to shoehorn them into their household budgets.
As a small business owner, ask yourself how much it costs you to find and keep a quality employee…then find his or her equally qualified replacement, while your business suffers through the void caused when that person leaves you to work at a place offering group health insurance? Re-establishing a small group health,life and disability plan might be worth its cost to you in the long run. The vital employees you must keep will be much less likely to leave you for work at your competitor’s shop down the street if you offer group insurance as a benefit.
Think about it.
Okay, you’re way too young to think about supporting yourself in retirement now, but the years have a way of slipping by and one day in the future while sitting in a room full of people it will dawn on you that you are the oldest one there. BUMMER! Going forward how are you going to continue living in the grand manner to which you have become accustomed when the pay checks stop coming in? Social Security retirement dollars won’t do the job…assuming it is still around, and you may or may not have a few pension dollars from your employment years. We are living longer now and you will need a resource for more cash in your later years so life insurance should be in the mix as a go-to resource.
If the question is when and how much to start investing for retirement, the answers are NOW and ANY. If it’s only fifty or a hundred bucks a month, start now. The older you will look back and thank the younger you, I guarantee it…and include life insurance in your investment strategy. Together with stocks, bonds and other investments, whole life insurance provides a hedge against dying too soon…providing income tax free cash to help support your widowed spouse/children…or living too long…providing additional income from its cash value if needed.
Over the past seven years life insurance dollars have supplemented Social Security to the tune of One Trillion Dollars*,(that’s a one followed by twelve zeros). Assuming my admittedly suspect math is correct: Starting today, you could spend $1,000,000 per hour, 24 hours each day for the next 411 Years before going through the full trillion bucks…so it makes sense to include life insurance in your retirement nest egg portfolio.
A prominent credit card company whose name you know well uses “Don’t leave home without it” as a very effective tag line in its advertisements. However, when you travel outside the good old USA, there is another “Don’t leave home without it” item that could save you thousands of dollars and days of worry and anxiety…Travel Medical Insurance.
Most US health insurance policies, personal, family and employer-sponsored group health insurance plans, cover you in the USA and its territories…and some cover you for limited periods of time outside the US. However, almost none pay to fly you back home if you are stuck in a foreign country after suffering a accidental injury or other debilitating health issue…So when you travel to foreign countries don’t leave home without first obtaining Travel Health Insurance.
When you take that cruise to the Caribbean, Europe, the far east, you are in a foreign country almost as soon as you see the boat pick up the harbor pilot outside your US port of departure.
Proper Travel Health Insurance pays for claims just like traditional major medical insurance…you select a deductible amount to pay before benefits kick in, then you and your insurance company share paying for the rest of your claim up to a agreed upon dollar limit. But here is the big kicker: If you are stuck in a hospital bed somewhere in another country, your vacation trip destroyed and no affordable way to get back home, a Travel Medical Insurance Policy containing a benefit called “Repatriation” could be your salvation.
“Repatriation” Benefits provide the cash to fly you home on an Air Ambulance and also pick up the tab to pay for someone to accompany you on the trip back. If you are traveling alone, Repatriation would pay to have someone you nominate fly out to your location and accompany you home.
Travel Health Insurance containing the Repatriation benefit is not expensive, and worth every penny. Get it from your travel agent or through your health insurance agent.
Real life case: This year, during a family vacation trip to the Dominican Republic, an Indiana high school coach was severely injured while swimming in the Caribbean. Between his medical bills on the island and travel expenses to return home the coach had to come up with more than $30,000. He had not thought to obtain Travel Medical Insurance prior to leaving the US and he certainly did not have ready access to that much cash. His family desperately started a GoFundMe page to raise the cash and was eventually able to pay the bill.
Our coach was lucky. He could have been half way around the world when he experienced his accident and his air ambulance bill could have been $200,000! Owning Travel Medical Insurance could have saved the day.
Here is a current example from a leading provider of Travel Medical Insurance:
7 day family vacation to Jamaica, 2 adults each age 40, two children ages 12 and 17…Travel Health Insurance with $250 deductible/$1,000,000 medical maximum and $500,000 Emergency Medical Evacuation & Repatriation Benefit…Price, $49.38
Enjoying Peace of Mind comes at a cost.
Just imagine not having to worry about life’s “what if’s”: What if I get hurt or sick and can’t pay my bills? /What if some nitwit plows into my car and kills me? What happens to my spouse and kids?/What if my money runs out before I die?/ The list seems endless.
You could take your lead from Gone With the Wind’s Scarlett O’Hara…”I’ll think about that tomorrow”…but, when tomorrow arrives, what then?
Think about investing in some peace of mind ownership. Owning Life Insurance creates some peace of mind. Owning Disability Income Insurance offers some peace of mind. Making an annuity a part of your retirement savings plan buys some peace of mind…Ignoring life’s “what ifs” does not eliminate them, but if you are willing to risk them anyway, you are on your on.
Share a cup of coffee with your insurance agent while the two of you explore some affordable ways to eliminate some “what ifs”. I’m sure your agent will pay for the coffee and you will have only invested a little of your time.
Landscapers recommend building hedges around property offering protection to landscaping should harsh weather arrive, not always completely saving it but at least allowing it to survive. Prudent people also erect financial hedges to protect their personal estates. Cash is king and cash flow is vital to supporting your way of life. Take a look at your last several months’ bank statements. Add up the bills which come due every month: Mortgage or rent, power, water, internet, cable TV, phone, food, clothing, car/lease payment, gasoline, other utilities, automobile insurance, home insurance, life insurance, medical expenses…the list seems endless.
May is Disability Income Insurance Month, and I expect you already feel as if you are up to your eyebrows in insurance premiums; however, allocating some additional premium dollars toward owning insurance guaranteeing cash when you need it most should be a priority consideration for you. Disability Income Insurance provides guaranteed cash to you during times when an accident or extended illness forces you out of the work force. Your group insurance at work might provide some short term disability income insurance but typically for a period of time no more than twenty-six weeks or less.
Your chance of being hit by an accident or illness during your working lifetime, cutting off your ability to continue earning a living, is greater than death during that time period…so owning disability income insurance may actually rate a higher priority than owning life insurance. Think about that, then call your agent and set up a time to explore owning disability income insurance. Sometime in the future you and your family may be glad that you did.
Who gets left holding the financial bag if your life suddenly ends today?…your spouse, your kids, your business partners? Let’s keep this to your immediate family. Question: Who pays the bills when you can’t…because you are dead…which bills?…well, rent or mortgage, power/water, groceries, car loans, roof/repairs to your home, credit card balances, ISP/cable TV provider,health insurance, house insurance, your bookie…the list seems endless. Grab your check book and add up each of the past few months’ bills you’ve paid…those don’t go away just because you, as Elvis, have left the building.
The problem is that your family will need a resource for cash…because you are no longer able to add to the kitty every payday. Today, look into your resources, money in the bank/checking account..perhaps an IRA or pension plan where you work, a personal investment account, equity in your home, credit cards, assets you own and can sell if necessary. Most of us are worth a bit more than expected…but also,many of us could not come up with a thousand dollars in cash on short notice.
Here is an example to remember: One Million dollars invested to return 5% per year net after taxes, creates a yearly income stream of $50,000.00. Can you buy a life insurance policy that pays your family $1,000,000.00, Income Tax Free, upon your death…$1,000,000.00 lump sum to be placed with a qualified financial adviser? Maybe so, maybe not…might be more affordable than you imagined; however, your kids should qualify for social security survivors benefits, and you may own some other assets which can be sold to add to the kitty…so, maybe you can get closer to that yearly $50,000 income stream with less life insurance.
Assuming your spouse also brings in a portion of your family’s monthly income, that income helps to offset the amount of life insurance needed by your family. Long story short, set an appointment with a qualified life insurance agent this week to discuss your unique situation. Look for a life insurance agent with some alphabet soup behind his/her name…CLU, ChFC, LUTCF…that agent has spent many hours on formal life insurance training and education, must meet strict ethical standards and wants to be your insurance partner for the long haul. You will not find that kind of partnership on-line…only buy on-line if you want to entrust your family’s future to a computer program and an artificial voice at the end of an 800 phone number when you need help the most.
New tax legislation does away with Obamacare’s mandate that one must be covered by health insurance or pay a fine (“tax”… thank you Chief Justice Roberts), with exceptions. BUT, the tax does not go away until January 1, 2019. Most other Obamacare rules and regulations remain in place for now…like a nagging back ache that just won’t go away.
There may be some wiggle room for those facing the tax. Personally, I am not so sure that the IRS has the will or incentive to pursue collecting it. The Patient Protection and Affordable Care Acts (Obamacare) were poorly constructed pieces of legislation, leaving IRS no mandate to collect the tax other than by deducting it from a person’s income tax refund…so, if a scofflaw has no refund coming…no way to collect the tax. Let’s see how that plays out in the near term.